News Non-Life14 Aug 2018

Indonesia:Lombok quake causes economic losses of at least US$340m

| 14 Aug 2018

The death toll from the magnitude 6.9 earthquake that rocked the Indonesian island of Lombok on 5 August has passed 400 and the government is estimating economic losses of at least several hundred million dollars.

The National Agency for Disaster Management (BNPB) said that the quake killed at least 436 people, most of whom died in building collapses. Damage to homes, infrastructure and other property is at least IDR5trn ($342m), said the agency, calling that a temporary figure that will rise as more assessments are made.

In a statement last week, president director of Maipark Indonesia Reinsurance, Mr Ahmad Fauzie Darwis, said that the areas most affected by the earthquake included East Lombok Regency, North Lombok Regency, Central Lombok Regency, and Mataram City. Loss exposure in the four affected areas amounted to more than IDR4trn with an estimated insurance loss through Maipark Catastrophe Modeling for the earthquake of around IDR10bn to IDR100bn.

The company's research development and innovation team will survey the earthquake location to calculate and record how much damage has occurred, the source of the earthquake, and the suitability of modeling, as well as classifying the intensity level according to the Modified Mercalli Intensity Scale (MMI), a unit to measure earthquake strength.

"We have sent a notification letter some time after the earthquake to all the ceding companies and asked whether there were claims from the insured who suffered losses on the policies they issued. So basically we are ready to pay the claim by first verifying the process in accordance with the existing provisions," said Mr Fauzie.

Crossed by two tectonic plates, Indonesia is one of the countries that is quite prone to earthquakes. However, awareness of asset protection through insurance is still low.

Mr MM Samosir, a director of Sinar Mas Dumasi Insurance, said insurance penetration was still relatively low in Indonesia, especially for rider products such as earthquake protection.

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